Republic of the Philippines

Surigao del Sur State University

Rosario, Tandag City, Surigao del Sur 8300
Telefax No. 086-214-4221
Website: www.sdssu.edu.ph

COLLEGE OF BUSINESS AND MANAGEMENT

PERSONAL FINANCE
Prelim Coverage
First Semester A.Y. 2021-2022

Instructional Material/Learning Guide 2

Title: MONEY MANAGEMENT

INTRODUCTION

Money Management is the process of budgeting, saving, investing, or otherwise overseeing the
capital usage of an individual or group. It can also referred to as “investment management”
and Portfolio management.

It involves and incorporates services and solution across the entire investment industry. As
investor increases their net worth they also often seek the services of financial adviser for
professional money management. Investment company money management is also a central
aspect of investment industry overall. It offers the capital consumer investment company fund
options that encompass all investible asset classes in the financial market. Investment
company money managers also support the capital management of institutional retirement
plans, endowments, foundations and more.

INTENDED LEARNING OUTCOMES

After reading and analyzing, students should be able to:

1. Describe concept of money management

2. Define income taxes
3. How to manage checking and savings account
4. How to maintain good credit
5. Identify the consumer credit

What is a financial advisor?

- Are typically associated with private banking and brokerage services, offering support for holistic money
management plans that can involve estate planning, retirement and more.

Learning Objective:

2.1 Describe concept of money management

CONCEPT OF MONEY MANAGEMENT

Money Management – is the process of competently utilizing financial assets.

Budgeting – is the process central to the task of money management

Saving – is one of the money management tools that help to create financial security.
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Money management is very concerned with cash flow.

Cash flow – is the net amount of cash and cash-equivalents moving into and out of a business.

Effective Strategies for Personal Money Management

- The key to successful money management is developing and following a personal financial plan.

A successful financial plan can be developed in sex steps

1. Set goals
2. Prepare a net worth statement
3. Gather past income and expenses records
4. Complete the Spending and Saving Planner
5. Keep records of spending and saving
6. Evaluate

A well-decided financial goal is:

Specific: what you want to achieved

Measurable: how much money you will need.
Tied to a time frame: when you want to achieve the goal
Reasonable: it can be achieved with the time and money available

Financial plan is a comprehensive evaluation of the individual’s current pay and future financial state by using
current known variables to predict future incomes, asset values and withdrawal plans.

Define Income Taxes

- Is one of the most known taxes around the World.

- The income tax of the companies or corporations is often referred to as companies tax or
corporate tax.

Most countries use income tax to fund basic government functions such as healthcare,
education and infrastructure.

Income tax is the amount of money we pay to government against our income.
- Is tax imposed on individuals or entities that varies with their respective income tax on business
entities as companies tax or corporate tax.

What is the Role of Business Finance

- Are in in charge of monitoring all the financial activities within the company,

Money Management – is to identify ways that the company can save on expenses and enhance
profitability.

Financial planning – create budgets as part of their financial planning. Strategies.

Budgets as part of their financial planning strategies.

Financial Forecasting – is the prediction of a company’s future financial goal and performance.

CHECKING AND SAVINGS ACCOUNTS

Checking account – is a deposit account held at a financial institution that allows withdrawals and
deposits.
- Also called demands accounts ot transactional accounts.

A Commercial checking account – is used by businesses and is the property of the businesses
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A saving account is an interest-bearing deposit account held at bank or another financial institution that
provides modest interest rate Checking accounts allows you to write checks and use electronic debit to
access your funds, and checking accounts typically do not have limits on the number of withdrawals or
transactions you may make each month.

Monetary Asset Management

- Encompasses how you handle all of your monetary assets, including cash on hand, checking
account, savings accounts and certificates of deposit, and money markets account

The goal is to maximize interest earnings and to minimize fees while keeping funds safe
and readily available for living expenses, emergencies, and saving and investment opportunities.

Liquidity – describes the degree to which an asset or security can be quickly bought or sold in the
market without affecting the assets price.

Provide Monetary Asset Management Services

Financial Service – the industry comprises companies that provide monetary asset management and other
services.

1. Depository Institutions – are organizations licensed to take deposit and make loans.
Example: Commercial Banks, saving banks, and credit unions.

1.1.Commercial; Banks –
1.1.1 Saving banks – ( or saving and loan associations – S & Ls) focus primarily on accepting
interest earning NOW accounts.
1.1.2 Mutual Saving Banks (MSB) is similar to a savings bank in that aalso accepts deposits and
make housing and consumers loans.

Credit Union (CU) is a member owned financial cooperative, democratically controlled by its members and
operated for the purpose or promoting thrift, providing other financial services to its members.

2. Stock Brokerages firms are licensed financial institutions that specialize in selling and buying stocks,
bonds, and other investments.

Guide to Savings Accounts

1. Safe Place to Access your Money- a saving accounts your money in a safe place.
2. Grow Your Money – Saving accounts pay interest on money in your account
3. Online Savings Accounts – Online – only accounts are a great option for higher earnings and lower fees.
4. Money Market Accounts – pay interest on your deposits and limit how often you can make a certain
transfers.
5. Certificates of Deposits (CDS) – your savings untouched for at least six months, you might be able to
earn more in a CD.
6. Need a savings Accounts – it’s generally wise to have a saving account, and they’re often free especially
at online banks and community banks and credit unions.

MAINTAIN GOOD CREDIT

How to maintain good credit?

Lenders use credit scores as one of the many ways to assess a prospective borrower’s creditworthiness.
Maintaining a good credit score by making wise financial decisions will ensure you can borrow when you need or
want to.

Improving Your Credit Score

1. Know what your credit Score

Payment history
Amount owed
Length of credit history
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 Types of debt owed
New credit
2. Improve the credit score factors that you can
3. Know when to ask for help

Maintaining a Good Credit Score

1. Don’t use all your credit

2. Take out credit slowly
3. Diversify your debt
4. Keeping using the same accounts
5. Don’t obsess over your credit score

CONSUMER CREDIT

- Is a debt that a person incurs when purchasing a good or service

- Also known as consumer debt.
- Economist and other financial analysts frequently measures which serves as indicator of economic growth
Economic growth – is the increase in the inflation-adjusted market value of the goods and services

Types of Consumer Credit

1. Installment credit – is used for a specific purpose, for a defined amount and for a specific period.
2. Revolving Credit – can be utilized for any purpose.

Advantages of Consumer Credit

The main advantage of consumer Credit is that consumers can purchase goods and services and pay them later.
Consumers can purchase items they need when their funds are low. Consumers credit offers a backup form of
payment and one monthly payment.

Disadvantages of Consumer Credit

The main disadvantage of using consumer’s credit is the cost. If a consumers fails to repay a loan or a credit card
balance, this impacts his credit scores, affects terms and conditions, and the result in late fees and penalties.

Choosing the Right Credit Card

Some tips on choosing the right credit card

1. Decide what you want from a credit card:

2. Check the fees and interest
3. Compare similar credit cards
4. Know your credit rating;

Understanding Credit Card Fees

Annual Fee
Late Fee
Balance transfer fee
Cash advance fee
Finance charge
Foreign transaction fee

Assignment 2

1. Identify and describe the transactions you can make of most credit cards ( 15 points)\

Earnings Rewards While Using Credit Cards

Rewards credit cards pay an incentive on your credit card purchases. You can accumulate rewards and then
redeem them for cash back, travel expenses, gift cards, and merchandise.

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Managing Your Credit Limit

Most credit cards come with a credit limit the maximum amount you’re allowed to spend on your credit card.
Your credit limit is determined based on your credit history, income and the type of credit card you’ve applied
for.

Reading Your Billing Statement

Each month, you’ll receive a billing statement that includes all the transactions made to your account within the
billing cycle.

Making Credit Cards Payments

You’re required to make a payment each month. It’s important to make your credit card payment by the due date
each month.

Closing a Credit Card

Not all credit cards are meant to be kept forever. You might consider downsizing the number of credit cards you
have. Or, you might close a credit card because the card issuer has changed the terms of the card.

Avoiding Credit Card Debt

The key to avoiding credit card debt is to make a habit of charging only what you can afford. Avoid using your
credit card to make everyday purchases unless it’s to earn rewards or better manage your money.

WHAT DO YOU NEED TO KNOW?

Money Management and the Budgeting Process

1. Income
- The first step in the budgeting process is to make a list of all sources of income you have coming in.
2. Expenses
- The next step in the budgeting process is to gather all of your bills, receipts and statement and make note
of where all of your money is going each month.
3. Goals and Percentage
- Set goals to change your spending habits or save enough money to go on a much-needed vacation. Treat
your savings account like a bill and the use it only for emergencies or when you have reached your goal.
4. Adjustments
- The necessary adjustments that make your goals attainable. Reduce the amount of times you go out to eat
and start cooking at home one in a while.

INSTRUCTION: Write your answer of any white paper and submit via Google Classrooms.
Date of submission: September 28, 2021 on before of our Time Class Schedule

Requirement 2.1 ( Research work)

1. Identify and Describe in your on Word(s) of Using Credit Cards (10 points)
2. Identify and describe the transactions you can make of most credit cards ( 15 points)\

VALUATION/ASSESSMENT
The performance of the students will be assessed using the following:

1. Graded Oral Discussion

2. Exercises
3. Synthesis/Reflection output

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 SUMMARY

Money Management is the process of budgeting, saving investing, spending or otherwise overseeing the capital
usage of an individual or group. It’s a central aspect of the investment industry overall of the investment company
money management

Income tax is one of the most known taxes around the world and imposed on both business entities as well as
individuals. A progressive tax is a tax rate applied to either income or profits, or spending that increases as
income/profits, or spending increases. Tax planning is a broad term that is used to describe the processes utilized
the individuals and businesses to pay the taxes due.

A checking account differs from other bank accounts in that it often allows for numerous withdrawals and
unlimited deposits, whereas savings accounts sometime limit both. Monetary asset (cash) management
encompasses how you handle all of your monetary assets, including cash on hand, checking accounts, saving
accounts and certificates of deposits, and money market accounts.

Consumer credit is a debt that a person incurs when purchasing a good or service, includes purchases obtained
with credit cards, line of credit and some loans. Consumer credit is also known as consumer debt. Installment
credit is used for a specific purpose, for a defined amount and for specific period. Payments are usually the same
amount each month.

References:
1. 3G E-LEARNING LLC, ( 2018) Managing Personal Finance

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